Public examination of directors may be ordered ex parte where prima facie fraud is shown and no notice is required.

Section 202 of the Companies Act was construed broadly to include an order directing the public examination of directors, so the objection that no appeal lay was rejected. The court also held that an ex parte order for public examination could be made where the rules did not require prior notice to the directors and the Official Liquidator had placed material showing a prima facie case of fraud or irregular conduct, including share allotment against promissory notes. The ex parte direction was therefore upheld, with the court noting that any inquiry after resignation would be confined to the period of responsibility.

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Issues: (i) whether an appeal lay against the order directing the public examination of the directors; (ii) whether the order for public examination could properly be made ex parte on the materials placed before the court.

Issue (i): whether an appeal lay against the order directing the public examination of the directors.

Analysis: Section 202 of the Companies Act was construed broadly. Although the provision did not expressly refer to an order of this kind, its language was wide enough to include an order directing the public examination of directors. The objection that no appeal lay was therefore not accepted.

Conclusion: The objection to maintainability was rejected.

Issue (ii): whether the order for public examination could properly be made ex parte on the materials placed before the court.

Analysis: There was nothing in the rules requiring notice to the directors before an application under section 196 could be entertained. The Official Liquidator had placed material suggesting that fraud and irregular conduct had occurred, including allotment of shares in consideration of promissory notes. That material was sufficient to justify a prima facie order for public examination. The court also observed that resignation, if effective, would limit any inquiry to matters within the period of responsibility.

Conclusion: The ex parte order for public examination was upheld.

Final Conclusion: The appeal failed, and the order directing the public examination of the appellant was sustained.

Ratio Decidendi: A broad statutory power to order public examination of directors may support an ex parte direction where the materials disclose a prima facie case of fraud or irregularity, and the absence of an express notice requirement does not invalidate the order.

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